Method and system for processing and recording the transactions in a medical savings fund account

1. A method of operating a computer system for providing health insurance, health payments, and recording keeping for participants comprising the steps of: entering into a computer a plurality of accounts one for each participant, and with a credit balance of money in each account, opening a custodian account with the money of said accounts, engaging a mutual fund to hold substantially all of said money shown on each account credit balance, and which mutual fund from time to time produces money income, periodically crediting in said computer each of said accounts with its proportional share of the money income accumulated since the last periodic crediting, said proportional share being automatically calculated and being the ratio of each account credit balance divided by the total mutual fund credit balance, establishing an insurance policy for beneficiaries of each account, periodically automatically transferring via a computer money from said custodian account to an insurance company for payment of said insurance policy as said payments become due, and via said computer calculating and debiting each of said accounts for its share of said insurance, to each account holder, vouchers to be used by the beneficiary to pay medical/health expenses not covered by said insurance for the account's beneficiaries, entering and debiting via a computer the appropriate account whenever checks are drawn and presented to the custodian account, and automatically transferring periodically causing a periodic transfer of money between the custodian account and the mutual fund so that a minimum balance is kept in the custodian account at substantially all times and money in excess of said balance is in the mutual fund.

2. The method of claim 1, further comprising the steps of automatically generating and transmitting reports periodically to each participant of the credit balance in said participant's account which is in said mutual fund, any credits from said proportional share of said mutual fund added since an immediately prior periodic report, any checks which cleared said account, including a list of payee, and amount, and if required for that participant's account a notice of amount and due date for additional money to be paid into the account to maintain a required credit balance, and a list of debits including payment of insurance premiums.

3. The method of claim 1 comprising the further steps of receiving applications for new accounts; entering data from each application into the computer, said computer reviewing said new applications for acceptance criteria stored in said computer; automatically generating a non-acceptance notice for any of said new applications which are not acceptable in said review and returning any money received said non-accepted applications; and automatically for each application which is accepted in said review automatically opening a new account; automatically ordering checks for said new account to be sent to a beneficiary of said new account, automatically entering said new account in a commission report, automatically reporting data of said new accounts to the custodian and including at least the account number, automatically adding said accounts beneficiaries in said insurance policy, and automatically generating insurance ID cards for the beneficiary.

4. The method of claim 1, further comprising the steps of periodically entering checks as received in a database of the computer including the amount and if known the name of participant and participant's account number; automatically comparing said entered checks account number with said accounts; processing said checks for deposit for each account where said account number comparison matches an active account; automatically generating a letter of explanation for inclusion with a return of the check if the check is for a cancelled account; verifying the check is proper if the check is for a new unopened account; and if proper then opening a new account, including enter data of the check into the participant's account for subsequent inclusion in periodic account statement, into a salesman report, into a report to the custodian, and if not proper then generating a letter of explanation, for inclusion with a return of the check; depositing checks which cannot be matched with any account, and which checks seem proper, and then automatically identifying in a pending file all unmatched checks.

5. The method of claim 4 further comprising the steps of automatically comparing each subsequent new account with said pending file.

6. The method of claim 4 further comprising the steps of generating for each address associated with an unmatched check a new account application file, and transmitting a new account application.

7. The method of claim 6, further comprising the steps of periodically entering in the computer reports received from the custodian of money received by the custodian for accounts, automatically verifying which money is for which active accounts and are proper, and crediting said receipt in said participant's accounts verifying for a new unopened account, and if proper, and then automatically opening said new account and entering data into the participant's account for subsequent inclusion in periodic account statement, in a salesman report, and in report to the custodian, and if not proper automatically generating a letter of explanation and return money to sender entering in the computer a record of any money which cannot be identified with any account, and which seem proper, in a pending file.

8. The method of claim 1, comprising the further steps of periodically receiving requests for name change of participants, requests for address change of participants, and requests for tax information change of participants; verifying that proper documentation supporting the requested change is received, and if not received, automatically generating a request for missing proper documentation; on said request for change of address routinely writing to the old address with notice of change of address and requesting response; and upon receipt of proper documentation, automatically entering the requested change of name, address, or tax information in said participant's account and for inclusion in the next statement of accounts.

9. The method of claim 1, further comprising the steps of entering instructions to close a particular one of said accounts due (a) instructions from the account participant, or (b) cancellation because of insufficient funds to pay insurance premiums, or (c) notice of death of participant and (d) if death notice of participant in family policy a non-election to keep family policy; then automatically verifying balance, including accrued money due said account to be closed; automatically processing a redemption check; and closing said account closed.

10. The method of claim 9 further comprising the step of upon receipt of death notice of a primary participant of a family account, verifying the accuracy of said notice, then offering by automatically generating a document and transmitting same to a surviving family member an option to have an account with its insurance policy, and responding to affirmative reply from surviving family member by automatically issuing a revised policy.

11. The method of claim 1 further comprising the steps of entering in the computer data of each check presented to the custodian for acceptance; automatically verifying if the balance in the corresponding account of said check would reduce said account below a minimum amount of money therein needed to pay at least the next insurance premium; automatically generating a signal for generating a refusing and returning the check, for insufficient funds if the account is below said minimum debiting via said computer said corresponding account with the amount of said check, if the account credit balance after said debiting is above said minimum.

12. The method of claim 1, further comprising the steps of sequentially entering requests from participants for an additional supply of checks; automatically verifying that the account for the participant ordering the checks is current; and automatically ordering the checks from a check vendor with instructions to send the checks to the participants.

13. The method of claim 1, further comprising the steps of periodically inputting data into the computer from sales groups who bring in new accounts, including requests for change of insurance agent, insurance agency, change of agent's name, change of agent's address, verifying at least partially with data in said computer that said requests are probably valid, accepting said request for change when said request for change agrees with said verification of probably valid data, and then automatically notifying at least the custodian, and sales group involved in the change of said change; and automatically requesting proper documentation from said sales group requesting said change for each of said requests for change which do not agree with said verification of probably valid data.

14. The method of claim 1 further comprising the steps of periodically, and at least once a month, computer sweeping the accounts and identifying those accounts for which insurance premiums are payable within a first time period and which have sufficient credit balance for said premium payments, and automatically generating from said identified accounts data and then using said data for: (a) automatically reporting to the insurance company, that said identified accounts will have premiums paid and including for each such identified account at least the policy number, and name, (b) automatically instructing the custodian to transfer money to the insurance company for payment of said premium (c) automatically notifying each of said identified accounts, which after payment of said insurance premium will not have sufficient credit balance after a next insurance premium payment which falls due in a second time period, said notifying including a minimum amount due and a first due date.

15. The method of claim 14 further comprising the steps of entering in the computer data of deposits received from participants subsequent to said notifying and prior to said first due dates; automatically generating and transmitting to each account holder, at or close to said first due date, notice for each account having a notice of insufficient balance, and which has not credited thereto at least said minimum amount due, a warning of policy cancellation comprising for each such account, a second minimum amount due to reach a sufficient balance and a second due date; entering in the computer data of deposits received from participants between said first and second due dates; automatically generating and transmitting to each account holder, at or close to said second due date, for each account having a warning of policy cancellation, and which has not credited thereto between said first and second due dates at least said second minimum amount due a notice of policy cancellation, including a date of cancellation.

16. The method of claim 15, further comprising the steps of entering in the computer data of deposits received from participants who have received a notice of policy cancellation, between the date of said second due date, and a grace time period after said date of cancellation; and for those accounts having received a notice of policy cancellation and for which no deposits have been received subsequent to said date of cancellation and said grace period, automatically cancelling the account.

17. The method of claim 1 further comprising the steps of periodically, and at least once a month automatically computer reviewing all accounts which are new since a most recent prior review, and computer tabulating data on said new accounts and automatically outputting from said data and transmitting (a) a first report to the insurance company to add said new accounts, (b) a second report with instructions to the custodian to add said new accounts, and (c) a third report to sales persons who are credited with said new accounts including identification of said new account, and automatically generating to said sales person a commission payment for said new account.

18. The method of claim 1, further comprising the steps of periodically, and at least once a month, automatically crediting each account with that account's portion of dividend from the mutual fund within said period then automatically determining if each account has sufficient balance for payment of the next insurance premium; and automatically generating and transmitting to each account holder, if said balance is sufficient, statements to said accounts having sufficient balances comprising for each such account, dividends from said fund during the period, checks cleared during the period including check number and amount; and and automatically generating and transmitting to each account holder if said balance is insufficient, a warning of insufficient balance to said accounts having insufficient balances, comprising for each such account, the minimum amount due to reach a sufficient balance, and a first date due.

19. The method of claim 18 further comprising the steps of entering in the computer data of deposits received from participants subsequent to a date of said crediting and prior to said due dates; automatically generating and transmitting to each account holder for each account having a warning of insufficient balance, and which has not credited thereto at least said minimum amount due, a warning of policy cancellation comprising for each such account, a minimum amount due to reach a sufficient balance and a second due date; entering in the computer data of deposits received from participants between said first and second due dates; automatically generating and transmitting to each account holder for each account having a warning of policy cancellation, and which has not credited therein between said first and second due dates at least said second minimum amount due a notice of policy cancellation.

20. The method of claim 1 further comprising the steps of computer automatically generating periodically, and at least once every three months, an amendment of Health Insurance Policy records comprising the steps of collecting participant's notice of data changes within said period relating to change of marital status and family members; automatically outputting said collected data to the insurance company whereby said insurance company may update and confirm its records for participants for whom notices are outputted, automatically outputting to participants from whom said notices have been received, responses there to that the notices have been received and collected.

21. The method of claim 1, further comprising the steps of (a) automatically generating periodically, at least once a year, for each participant a detailed statement including credits during the period, insurance premiums paid during the period; medical expenses during the period, and including the checks debited by check number, and amounts; and automatically sending to each participant said detailed statement.

22. The method of claim 21, wherein said generating step further comprising automatically generating annual renewals process data for each participant who is a group.

23. A method for data processing relative to the establishment, processing, maintenance and supervision of a Medical Savings Fund Account (MSFA), a financial services product, consisting of a money market mutual fund (which may produce taxable or tax-free dividends) and a health insurance policy purchased by a plurality of customers, including individuals, family groups and other defined groups comprising employers on behalf of their employees, funding said money market mutual fund account to pay for health insurance benefits with systematic premium payments, a checkwriting service for payment of medical expenses up to the amount of the deductible stated in the insurance policy, records provided for tax reporting requirements and possible income tax benefits, said data processing method comprising in a data processing system the steps of: establishing an account in a money market mutual fund; recording data relative to the issuance and maintenance of a health insurance policy; providing a supply of checks (drafts) to be drawn on the money market mutual fund account of the system for payment of medical expenses; systematic payment of health insurance premiums when due and payable; payment of monthly dividends automatically on average account balance; monthly automatic financial status reports to participants; notices and reminders automatically when account balances are not sufficient to pay premiums and/or medical expenses; and annual statements automatically for general accounting and tax reporting purposes.

24. A system for providing health insurance, and medical/health/tax recording keeping for participants comprising: a data base having a plurality of participant's accounts with a credit balance of money in each account, a mutual fund account having a balance of substantially all of said participant's accounts credit balances, and a custodian account having a balance of substantially a difference between said mutual fund account balance and said participant's account credit balances; program and computer means for periodically automatically crediting each participant's account with its proportional share of money income accumulated since the last periodic crediting, said proportional share being the ratio of each participant's account credit balance divided by the total mutual fund balance; program and computer means for periodically automatically transferring money through said custodian account to an insurance company which provides health insurance to beneficiaries of said participant's accounts for payment of an insurance policy as said payments become due, and for debiting each participant's account for its share of said insurance; program and computer means for automatically issuing to each participant's accounts beneficiaries means for use by the beneficiaries to pay medical/health expenses not covered by said insurance; computer and program means for debiting the appropriate participant's account whenever said checks are validly drawn and presented; and computer and program means for causing a periodic automatic transferring of money between said custodian account and said mutual fund so that a minimum balance is kept in the custodian account at substantially all times and money in excess of said minimum amount is in said mutual fund account.